The risk of failures is growing, even “well-run businesses won’t make it” and the UK travel sector’s global position is threatened.
That is the view of easyJet chief executive Johan Lundgren who issued a stark warning as he delivered the keynote address at the start of Travel Weekly’s Future of Travel summit this week.
Lundgren said: “EasyJet is in a privileged position because we came into this in a strong position, but there is no guarantee that will last forever. We need to look at any options available for us to preserve cash and get access to more liquidity.”
He warned: “There will be well-run businesses which simply won’t make it. I can’t see it any other way.
“But the solution is not only to take on debt. You could easily see big companies survive but have no funds to invest in sustainability [and] invest to compete with rivals which have received support from foreign governments, which means the UK industry will lag behind.”
Lundgren insisted: “I maintain the view that the government should not interfere, [but] that is not what is taking place in the rest of Europe.
“The UK industry could find itself tremendously disadvantaged.”
The German government has made €9 billion in credit available to Lufthansa and the French government provided €7 billion to Air France, with the Dutch, Swiss, Spanish, Italian and Austrian governments also making funds available to airlines.
Lundgren said: “The UK industry as we have known it, which provided one of the best environments for customers in the world, could be something of the past unless the government starts supporting it.
“The fares that have been available, the options that have been available, the product development have been driven by fierce competition.
“Measures introduced elsewhere to support the industry, we haven’t seen yet. The furlough scheme ends in October whereas furlough schemes in most other major European markets continue through the winter.”
He said: “The UK came late to the party on this whole thing. Aviation contributes close to 3.5% of GDP. You can’t just ignore that. That’s the reason why other European countries are saying ‘We have to look after this industry’.”
Lundgren added: “One of the arguments for Brexit was to take back control, to take decisions that would benefit the UK.
“This is the opportunity to take decisions that mean the UK will be better off.”
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